A leasehold property can be used for a limited period of time, according to the arrangements in the lease, normally from five up to ten years. It is
different from simple renting, because with leasehold one can buy and sell on the open market. Leaseholds are renewable when the existing lease agreement
is completed.

Among the advantages of leaseholds, it is known that they are far cheaper than freeholds and easier to arrange. With leasehold, one has to pay a monthly
rent as long as the lease lasts. However, bricks and mortar do not belong to the owner, an aspect that limits the financial assistance if one needs to
apply for a bank loan, for instance. The leaseholder may be limited regarding structural changes in the property, as he needs the owner’s permission.
Furthermore, the buyer of the leasehold is responsible for the maintenance and running of the property, which implies more duties.

There exist different forms of leasehold contracts, although many properties can be leased from 30 to 100 years on a renewable lease. It is required to pay
two months’ rent in deposit plus the first month’s rent. Afterwards, the rent is due to be paid monthly upfront.

On the other hand, by owning the freehold, the keeper benefits by owning an asset. The buyer will have to sign a new title deed with the public notary, pay
VAT on the purchase and register the purchase of the property. The freehold way means that you don’t have to pay a monthly rent and you can always sell the leasehold to the property . However, there is a disadvantage: investments are much more considerable when acquiring a freehold.

Finally, both freeholds and leaseholds are also suitable options for those who want to set up a business, but the key is to know which sort of funding you
have in place and the kind of business you want to establish.

Further information:
Leasehold Advisory Service